Factbox: The vagaries of EU bank bailout

Reuters Staff

3 Min Read

LONDON (Reuters) - Below are some of the bank restructurings in Europe, illustrating the wide variation in approach.

IRELAND - 2010-2013:

Ireland's Anglo Irish Bank, which was put into rundown after a 30 billion euros bailout, coaxed its junior bondholders into accepting significant losses through 'liability management exercises', as did the other troubled Irish banks and their Greek peers.

SPAIN - 2012:

When Spain's Bankia was rescued in late 2012, shareholders were left some equity. Retail investors who bought junior bonds not covered by a state guarantee could be repaid anyway after claiming the bonds were mis-sold, while other unsecured bondholders whose claims out-ranked shareholders and "preferentes" lost out.

THE NETHERLANDS - 2013:

When the AAA-rated Netherlands rescued SNS Reaal in February 2013, the government unilaterally "expropriated" the bank's subordinated bonds, shareholders' equity and some private hybrid capital instruments - a decision now facing legal challenge.

The SNS resolution also jarred with other governments who opted to keep private shareholders in the game even when economics dictated otherwise, most remarkably in Ireland's handling of the 2012 rescue of the Allied Irish Banks, when the government made a 6.1 billion euros "capital contribution" with no dilutive effect to avoid wiping out shareholders whose stake was already less than 1 percent.

GREECE - 2013

More recently, in summer 2013, Greece broke new ground when its 27.5 billion euros banking bailout left private investors who owned less than 80 percent of three lenders in control of their boards. The fourth, Eurobank, is 100 percent state-owned and under the control of Greece's bank rescue fund.

CYPRUS - 2013

On the depositor front, the tiny island of Cyprus rocked the euro zone in March when it proposed finding some of the money to shore up its banks by levying a tax on small depositors who were covered by the EU-wide bank guarantee scheme.

Cyprus ultimately backed down on that proposal, but still imposed losses of almost 50 percent on uninsured deposits, attracting far more attention than fellow EU member Lithuania did when it imposed losses on the uninsured depositors of its sixth-largest lender Ukio Bankas a month earlier.